ASIC & APRA find high level of life insurance claims paid
Over 90% of all life insurance claims in 2016 were accepted by life insurance companies, according to a joint research project by the Australian Prudential Regulation Authority (APRA) and Australian Securities and Investments Commission (ASIC).
In 2016 there were 103,100 claims finalized, of which 95,000 or 92.1% were accepted and 8,100 or 7.9% were declined by life insurers. There were a further 23,200 claims which were either withdrawn or undetermined at the end of 2016. Disputed claims of 4,400 represented only 3.5% of all reported claims in 2016.
A total of 16 insurers provided information to APRA and ASIC regarding Term Life, TPD, Trauma and income protection claims.
ASIC Deputy Chair, Peter Kell, commented that these results were consistent with an earlier report conducted by ASIC which showed “that over 90% of life insurance claims are paid in the first instance by insurers”.
APRA noted in the paper that, while further work needed to be done to increase reliability and comparability of this data at a company level, “publication of aggregate level data is an important step towards achieving the objectives of this initiative, and will materially enhance transparency and inform public debate.”